How to Retain Skilled Construction Workers
Construction is a major sector of the UK economy which generates almost £90 billion each year and employs in excess of 2.93 million people. That is around 1 in 10 of all UK workers.
But there is a problem.
Many construction workers are now retiring, and the rate of retirement looks set to increase, with no less than 22% of the workforce over 50 and 15% in their 60s. The industry is losing out to competing sectors where work is more stable and comfortable, less demanding physically - and pay is more competitive.
With an ageing workforce and a poor pipeline of young people, the construction industry is already facing a skills crisis.
As many as one-fifth of all vacancies in the wider construction sector cannot be adequately or permanently filled because employers are unable to recruit staff with the right skills, qualifications or experience.
The Federation of Master Builders has found that many construction companies, particularly SMEs, have been struggling to recruit skilled tradespeople, such as bricklayers, carpenters, plumbers and electricians.
Demand for these basic but essential skills is far outstripping supply. As a result of this skills gap, the FMB said that wages are rising sharply for these trades. Combined with recent increases in the cost of building materials, this has dealt a sharp blow to small and medium construction companies.
And the problem is set to get worse with Brexit.
There is a growing concern throughout the industry that more and more skilled tradespeople from the EU who are currently working in construction across the UK will leave the country due to immigration issues or fears. Approximately 10% of the UK construction industry workforce is made up of migrants. With approximately 165,000 construction jobs currently being filled by EU nationals, the industry simply cannot afford to lose this contingent.
The government has set itself the ambitious target of building 300,000 homes every year in England alone. This is looking even harder to achieve without the availability of skilled people to build them.
So the question is, how can UK construction SMEs bring in skilled construction workers, and retain them?
Subbies or employees?
The construction industry has traditionally employed subcontractors. This can be the most flexible and cost-effective solution when there is a need to bring in skills to complete a big project.
It works well when there is a large pool of skilled people keen to come in and get to work, but the use of subbies makes it inevitable that there will be no company loyalty and when the right skills are in short supply, it may be impossible to bring in the right people.
The answer may be to move away from the use of casual workers and to start creating larger cadres of employees.
Naturally, this will have a downside. It runs the risk of having workers idle when business is slack, and having a large workforce instead of casual labour will inevitably increase wages and administration costs.
However, it will allow larger builders to call on a reserve of highly skilled people – and a high level of skills are likely to be all the more important as the technical demands of the construction industry steadily mount. Much new development requires sophisticated construction techniques and to call in new and specialised skills that conventional subcontractors may struggle to provide.
A retained workforce can be trained and developed to provide the necessary skills – providing a real business advantage to their employers. But the industry is becoming increasingly technically demanding, as new technologies are introduced to meet environmental and cost objectives.
You may need to invest in the training, development and retention of a permanent workforce simply because you will not be able to call in the skills you need from subcontractors.
According to the Chartered Institute of Building, the industry will need to employ over 150,000 new workers by 2021 simply to keep up with current levels of demand.
One of the ways in which the industry and the UK government together are attempting to tackle this challenging target is through the recruitment of apprentices. Close collaboration between businesses and training colleges can ensure that students learn the necessary skills to ensure further shortages can be more adequately addressed.
The Government has announced a commitment to funding an additional 3,000,000 apprenticeships across all industries by 2020. Over £1 billion have been invested in training and apprenticeship programmes. However, these programmes do not guarantee jobs, and while many SME construction companies have ignored these apprenticeship programmes as too expensive, others have used apprenticeship schemes to complete a specific job, only to put their interns back in the training pool once the project was finished.
It looks although the factors that are discouraging young people from coming into the industry are still doing so.
Upskilling and Reskilling
But if young people are still not coming into the construction industry, is it possible to use training to retain more experienced people who have already made their career in the construction industry?
Investing in training is costly – but it can be a powerful incentive to retain skilled people at a time when the industry is making ever-increasing demands of skills and knowledge. Refreshing skills – upskilling and reskilling with new techniques and methods that are likely to be in increased demand is an investment in the future, both for the employers providing it and the workforce whose skills are being enhanced.
Over 60% of employers in the construction sector already have some type of skills development programme in place, from transferring employees between different departments or duties to offering additional benefits to support and encourage training. These types of schemes could provide the means to upskilling the current workforce and increasing productivity, and help organisations retain their best employees.
Obviously, it must be accompanied by the offer of a permanent, well-paid and secure job, or the company providing the training will simply be providing a free upskilling service for subcontractors, who would have no qualms about taking their new skills elsewhere and increasing their rates because of them.
It looks as though the keys to retaining skilled construction workers could be:
- Offering apprenticeships which lead to secure jobs and worthwhile career progression
- Providing valuable training to upskill staff
- Offering secure and rewarding permanent roles to people who have benefited from the training
- Providing career progression, ensuring that there is no temptation for staff to look elsewhere
Dealing with the costs
The construction industry has grown and developed with the use of subcontractors. Making a switch to permanent workers will require a cultural change at all levels – and it will also have a cost implication.
The cost of a permanent workforce, and the cost of training scheme way both mean investment is necessary.
At Rangewell, we work closely with the construction industry, from specialists in scaffolding and utilities to providing funding for building materials and JCT contracts. With our help you can find construction finance solutions which will allow you to make the necessary investment in the future of your workforce – and the future of your business.